Question

CH 15 Compensation and Retirement Planning

Heather drives 4,000 miles for her business in 2018. She elects to use the standard mileage rate method to deduct automobile expenses. She also has business-related expenses for the automobile of $1000 of gasoline. $600 of repairs and maintenance. And $200 of business parking and tolls. How much will Heather deduct?

Question 2 options:

	$1,800
	$2,180
	$2,380
	$3,980 My reasoning is 2018 - 54.5 cents per mile (rule) 4000*.545 = 2180? is my answer right?

Answer 1

Solution: If someone elects the standard mileage rate to deduct automobile expenses, then he/she can not deduct actual expenses incurred but under this method few expenses are allowed for deduction:

• Business parking fees and tolls
• Local and state personal property taxes associated with vehicle.

For year 2018 :

per mile dedution is 54.5 cents

Thus, the amount that Heather can deduct = 4,000*54.5cents + $200 (business parkings &tolls)

= $2,380 (Option 3)

Note: u forgot to add parking & toll charges.